Report: Apple to Unveil Mobile Ad Network with iPhone OS 4

| Rumor

Apple will be unveiling an Apple-branded mobile ad network for the iPhone and iPad platforms during the iPhone OS 4 media event on Thursday, April 8th, according to AllThingsD. Citing unnamed sources “familiar with the matter,” the report confirms what has long been expected since Apple bought mobile ad company Quattro Wireless in January of this year.

Reporter Peter Kafka also suggested in his piece that the news will be greeted warmly by Google due to that company’s acquisition-in-progress of larger mobile ad company AdMob. Google’s purchase of AdMob has been held up by regulators concerned about the level of competition in the growing mobile ad industry, and competition from Apple could be the evidence that Google needs to convince regulators that the industry is healthy and competitive.

Somewhat ironically, Apple bought Quattro Wireless only after failing in a bid to purchase AdMob — that bid failed because Google beat Apple to the punch, but it’s possible that Google’s deal may only be sanctioned because of whatever Apple may introduce on Thursday.

In any event, Mr. Kafka also suggested that Apple could open up its mobile ad service to competing platforms, which only goes to show that unnamed sources familiar with the matter will only get you so far - this reporter will print this article and eat it if Apple announces a mobile ad network that is anything other than an iPhone OS-exclusive mobile ad network.

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I have total trust in everything you say Bryan, but the video of you eating your words will be posted on YouTube, won’t it? Should it ever come to that.


Bryan:  Look at the larger picture.  Aside from generating revenues and profits from ads, Apple will also want to capture ad revenues from even Android and Chrome based devices, because, if Apple’s ads and/or services displace Google’s ads and/or services on its own devices, Google’s revenue model for its Android and Chrome devices is at least severely impaired, if not destroyed. 

Remember that it only makes sense for Google to develop and provide Android and Chrome for free, if it can get sufficient ad revenue from those devices.  If OEMs and/or end users put other services on Android and Chrome, such as Apple’s services, Google gets less money to the extent that OEMs and/or end users substitute other services for Google’s services, so it makes business senses for Apple to spread its services, including ads, to every devices running Android, Chrome, and Windows.  Nokia, if it can ever decide which OS it will use, might also get Apple’s services on its devices, but Nokia is less of a threat than Google, because it does not provide a quality mobile OS for free.  The only OS that Apple may neglect would be Linux, and that is only because Linux doesn’t have any significant market share.

Google made have made a strategic error by open-sourcing Android and Chrome.  That means that any OEM can put whatever search and other services on Android and Chrome that it wants.  To stop such defections, Google is paying OEMs that install its search and other services on Android phones a generous part of the ad revenue that those services generate.  Apple can afford to give OEMs and even greater part of ad revenues than Google, because Apple gets most of its revenues from its devices.  Google, however, depends on ad revenue, because it really doesn’t have any other meaningful source of revenues.  Apple’s services, thus, can impair Google’s business model by being on every significant platform and offering a larger split of ad revenue than Google can afford to offer.

As John Martellaro said:  Business is war.  Google started this fight by giving away a quality mobile OS for free, which attacked Apple’s stream of revenue from the iPhone.  Now, it’s Apple’ turn.

Bryan Chaffin

LW: Oh, I had already realized I would have to do that! Been trying to think of a way to cook paper - or do something with it to make it less papery - just in case. So far, I’m drawing (ha!) a blank.

Nemo: Your points are all excellent, as usual, but my insta-counter is that Apple has never, ever concerned themselves with other company’s markets. They’ve said repeatedly that they’re only focus is making the best products possible, and that the market share numbers and other factors would take care of themselves.

When you combine that with the company’s penchant for controlling the whole widget, I think it obvious that a mobile ad service from Apple would focus exclusively on providing its own developers, and only its own developers, with ad-delivery.

Apple’s service will then only have to do with such issues as screen resolution that are entirely under their control, and with the App Store, they’ll be able to even effectively control placement, frequency, and other related issues.

Yeah, I’ll eat this article if I’m wrong. smile


“When you combine that with the company?s penchant for controlling the whole widget, I think it obvious that a mobile ad service from Apple would focus exclusively on providing its own developers, and only its own developers, with ad-delivery.”

Disagree w/ you here…

Apple will use ad related patents to cut into Google’s market. Without a doubt FREE Android is a heat seeking missile aimed at Apple’s huge profit machine. And fremium is the way Google kills markets. (Wanna kill Walmart? Open up a FREE store within 20 miles of 10% of all Walmarts.)

Apple’s growth will be cut back materially because of Eric and his Android minions. How? They bought Android and gave it away. Jobs must reply with some damaging blow on their territory.

When Apple takes $$$ off the table across all platforms; mobile and desktops, it will have justly pained the fools that unleashed fremium (the nuclear scenario).

Without Android, Apple and Google could have become behemoths. Now, it’s sort of a ballgame and my bet is with Apple. Why?

Leadership is decisive.


Bryan:  Apple starts by putting its services on its platforms, but where the opportunity exist to either capture profits, impair a competing business model, and/or make its proprietary standard pervasive, Apple has not hesitated to do so.  My examples are iTunes, which quickly made its way to PCs, thus allowing Apple to control both the standard for online media stores and turn the majority of PCs into boxes that generate revenue for Apple and provide for the spread of Apple’s iPods, iPhones, iPod Touches, and now iPads on a majority of Windows PCs that work with iTunes and the App Store.  Apple also put Safari on the PC so as to force Microsoft to either adopt open standards in IE or see IE fade into oblivion. 

As Apple moves into services that are either based in the cloud or that are based on a proprietary app or both, more opportunities will present themselves for Apple to both vigorously compete, defend its business models, and/or spread its standards and its platforms.  While Apple almost always begins to exploit those opportunities on its platforms first, rather than simultaneously developing for OS X, its derivatives, and other foreign platforms, Apple does not hesitate to produce high quality services for foreign platforms, when doing so is the best way for it make profits and win the competition in the market.

Bryan Chaffin

Nemo, you continue to raise great points, and I am prepared to carry through with my grandstanding gesture.

I feel the whole widget issue is the trump card on this, though.

Fortunately, there’s just one day to wait to find out. smile

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